NINETY EIGHT REGENCY

GM's Plodding Culture Vexes Its Impatient CEO

4 posts in this topic

GM's Plodding Culture Vexes Its Impatient CEO

By SHARON TERLEP

One Friday recently, the chief executive of General Motors Co. sat down with some top lieutenants at the company's technology center outside Detroit and was asked to approve plans for a new generation of cars and trucks.

But before the executives could present the pictures, charts and financial projections they had prepared, Edward E. Whitacre Jr. stopped them to ask why they were having the meeting in the first place.

"Y'all have checked all this out pretty thoroughly," Mr. Whitacre said in his Texas drawl, according to a participant. "I imagine you're not going to approve something that's bad or unprofitable, so why don't you make the final decisions?"

Mr. Whitacre then let the team's plans stand—and suggested that the group end its regular Friday sessions.

Pushing authority and decision-making down into GM's multilayered organization and cutting bureaucracy are a big part of the change Mr. Whitacre is trying to bring to the car maker.

"To succeed, their whole business has to change. They have to be leaner, meaner and faster," said Peter Kaufman, president of investment bank Gordian Group. "They clearly didn't have their act together when they came out of bankruptcy."

Since he was named GM chairman last June with almost no car-industry experience, the 68-year-old Mr. Whitacre has focused on one area where he believes he can make a big contribution: changing the company's plodding culture.

In the past, even minor decisions had to be mulled over by committee after committee. Once several years ago, the company tried to stamp out bureaucracy—and ended up appointing a committee to oversee how many committee meetings should be held.

Mr. Whitacre is trying to empower his top executives to run their parts of the company, although at times that can cause some confusion.

In December, Mr. Whitacre named a new head of GM's North American operations, Mark Reuss, an engineer who had been running the Australian unit. He was told to boost GM's market share without relying on costly discounts. Reporting to Mr. Reuss was an executive who came from the Buick division, Susan Docherty, who was put in charge of sales and marketing.

Less than three months later, Mr. Reuss went to Mr. Whitacre and said he felt he needed to have more of a hands-on role in North America, so they reshuffled responsibilities again, with Mr. Reuss taking sales duties away from Ms. Docherty. "He wanted to pick his own team and Ed supported that," a senior executive said.

GM executives said that move and other management changes Mr. Whitacre has made have left many people much less secure about their jobs than before.

"There is a high sense of urgency and accountability at the senior level here," Chief Financial Officer Chris Liddell, who was hired from Microsoft Corp. last fall, recently told reporters. "There are good people here. They need to be empowered and held accountable."

One way Mr. Whitacre is signaling a new style at GM is by making himself far more visible and accessible than predecessors Frederick "Fritz" Henderson and Rick Wagoner, who spent much of their time in the executive suites on the 39th floor of GM's Detroit headquarters.

link:

http://online.wsj.com/article/SB10001424052702303411604575168232881859048.html

0

Share this post


Link to post
Share on other sites

Good article. "They clearly didn't have their act together when they came out of bankruptcy." Ouch.

0

Share this post


Link to post
Share on other sites

There is plenty still to do. You don't undo th mess they had in 6 months and still build cars. These improvments and changes need to continue and will go on for seveal years. They will then need to continue to tweek it to keep it up to date.

0

Share this post


Link to post
Share on other sites

There is plenty still to do. You don't undo th mess they had in 6 months and still build cars. These improvments and changes need to continue and will go on for seveal years. They will then need to continue to tweek it to keep it up to date.

You got that right

Edited by RjION
0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

Loading...